A Crypto Fund Raises $165,000,000, Pound Extends Rally and the Market Stays Bullish – Market Meditations #3
Market Meditations | August 19, 2020
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New participants of the crypto market are panicking, the market has stalled and we’re seeing prices drop across the board. This is natural and to be expected during an uptrend, there is not enough data to suggest the entire market is about to reverse and with good risk management we can stay exposed to further upside and be able to survive the inevitable reversal.
Given this panic, I’ve decided to make today’s edition available to everyone and help as many people as possible. If you would like to receive guided market meditations 3+ times a week and always stay one with the market consider becoming a premium subscriber.
Zoom Out! Macro Structure is Bullish – Bitcoin
Don’t Overcomplicate Analysis – Chainlink
Pantera Tells SEC Its Crypto Fund Has Raised Nearly $165,000,000
Barstool’s Dave Portnoy: ‘in Crypto You Can Pump and Dump All Day Long’
Coinbase Explains How It Evaluates Erc-20 Tokens for Listing
Pound That’s ‘Cheap as Chips’ Extends Rally to Erase 2020 Losses
Turkish Residents Panicking Over Massive Inflation
A Huge Tesla Bet Pays off Big for One British Fund
Trump Shows Support for Oracle’s Bid to Buy Tiktok in the U.S
Market Meditations Podcast Release!
The Difference Between Practice and Theory
After weeks of steady uptrend, the market has met some resistance. Now is not the time to panic. Providing you aren’t overexposed and have solid risk management in place, zoom out and look at the big picture.
Zoom Out! Macro Structure is Bullish BITCOIN / DOLLAR
$10206 – Previous Key Resistance. This level was claimed and is holding strong. Bullish argument
$11540 – Previous Key Resistance. Immediate key macro-structural level. The most important short term argument to pay attention too. A drop to sub $11,000 becomes probable if we lose this
7EMA – Supporting Argument. A clear indication showing the strength of the current uptrend. Learn more here
Don’t Overcomplicate Analysis CHAINLINK / DOLLAR
You have my key levels from previous editions. Now we zoom out and look at the macro structure. When it comes to price discovery, we have no previous data to make long term support and resistance arguments. Fibonacci levels are a personal favorite of mine in these situations to have a means of consistently analyzing an asset. You can learn more here.
$14.87 – 0.382 Level. Holding this level is our strongest bullish argument at the moment.
$13.29 – Danger Zone. Below this level, we will have retraced more than half our current run. This would temporarily weaken our bullish arguments.
Pantera Tells SEC Its Crypto Fund Has Raised Nearly $165,000,000. Pantera capital, one of the earliest and most well known crypto funds has raised $164.7 million in private placements from just under 200 investors for its Venture Fund III, helping it more than double in size since it launched in 2018, according to a Form D filing with the U.S. Securities and Exchange Commission (SEC) on Friday. Pantera described it as primarily invested in infrastructure, finance and exchanges in the digital asset space. Read more
Barstool’s Dave Portnoy: ‘in Crypto You Can Pump and Dump All Day Long’. Dave Portnoy’s entry into crypto has drawn a lot of attention. The now famous day trader told his followers on stream that ‘the thing I like about pump and dumps in crypto is it’s encouraged’. Portnoy is walking on thin ice, given that the regulatory status on most of these ERC-20 tokens is still unclear and the SEC has been taking strong action against influential people talking about potential security tokens without the necessary disclaimers. Will Portnoy be the new McAfee’s ‘Coin of the day’? Read more
Coinbase Explains How It Evaluates Erc-20 Tokens for Listing. In a blog post published by Coinbase,, the cryptocurrency exchange explained what technical factors it looks into before deciding to list an ERC-20 token on its trading platforms. The four most important qualities that each token should possess are: verified source code, industry-standard library use, limited scope for privileged roles, and simple and modular design. Coinbase seems to be working towards their long-term plan after claiming that they aim to “support at least 90% of the aggregate market cap of all digital assets in circulation.” Read more
Pound That’s ‘Cheap as Chips’ Extends Rally to Erase 2020 Losses
In a recent Bloomberg Article we find a summary of: the GBP currency rise in the longest winning run since the end of July and how the dollar’s decline is the main driver of the pound’s move.
A simple technical analysis shows us the rally on the GBPUSD (commonly referred to as Cable), each tick represents a resistance level breaking or a support level holding.
The currency rose as much as 0.2% to $1.3267, extending gains after inflation in July was faster than anticipated. Today, we saw a rise in inflation (CPI), mainly attributed to retail and oil prices. UK CPI inflation for July rose 1.0% year-on-year which is higher than the 0.6% expected by markets. However, the rally is mostly driven by the greenback’s drop.
“The dollar is doing most of the heavy lifting for the pound. Sterling is still cheap as chips. Everyone has problems, most of them huge, but U.K. Plc has fewer than most.” – James Athey, Aberdeen Standard Investments.
We could not be further from March when the dollar and the 10 year Treasury were considered safe havens amid the economic chaos created by the C19 virus. Now, increasing numbers in the US, fear of renewed lockdowns and expansionary monetary and fiscal policies have reversed investors’ perceptions of the dollar.
Emerging markets’ currencies tend to fare better with a weaker dollar. Think 2013 when the Fed’s reduction of its quantitative easing sent EM currencies into a tailspin. Interestingly, the recent dollar weakness has mainly been reflected in the strength of other developed currencies.
Outflows from the dollar have helped the currency rally, despite the possibility that the nation will transition out of the European Union without a trade deal. Most recently, Brexit trade talks set to stall again over British truckers’ EU access; Brussel warns that UK demands on haulage are too close to single-market rights.
Of course, the dollar remains the global reserve currency but it will be interesting to see where we go from here. The direction of travel will depend on future US monetary and fiscal stimulus and certainly the outcome of the US presidential election later this year.
Turkish Residents Panicking Over Massive Inflation. Turkish are losing faith in its local fiat currency, with confidence in the lira falling 20% this year. It is rampant inflation which is causing this fall in confidence. According to a Reuters reporter on August 14, locals are ditching lira and converting it to dollars and buying gold. This against a backdrop of market interventions and reassuring stories about monetary stability coming from the government. Inflation is currently at a whopping 11.8% and has overtaken the amount of interest offered at savings banks. Locals expect this panic selling to continue if the government cannot boot confidence in this currency which has dropped almost 20% in 2020. Read more.
A Huge Tesla Bet Pays off Big for One British Fund. A British fund that has grown more than seven times faster than peers this year has one big bet to thank. Scottish Mortgage Investment Trust Plc’s holding of 1.87 million shares in Tesla Inc. has increased in value by more than £2 billion since the end of March as the electric carmaker’s stock price has surged to a record. That, along with investments in other U.S. tech giants and stay-at-home winners, means the fund has provided a year-to-date return of 56% versus 7.5% for its peer group. Read more.
Trump Shows Support for Oracle’s Bid to Buy Tiktok in the U.S. Trump has recently announced that U.S. enterprise software giant Oracle is a “great company” when asked if it would be a good buyer for TikTok. His endorsement for Oracle, co-founded by billionaire Larry Ellison, comes after reports that the Califronian tech firm is interested in buying Tiktok’s North America, Australia and New Zealand businesses from Chinese parent company ByteDance. It’s unclear how much Oracle is prepared to pay for TikTok but some of ByteBance’s investors value TikTok’s global business at $50billion. Read more.
From Debt to Self Employed in 2 Years – Market Meditations Episode #1
Josh, better known as Nebraskan Gooner, shares his journey from debt to self-employed in 2 years. We learn about the key mindsets and habits that he’s been using to get by since the age of 13 with no role model in his life.
I know a lot of our readers are here trying to build richer lives with the goal of working for themselves. I’ve found the best way to reach a goal is to study those who have made it, and replicate there path until you can start crafting your own.
There’s a lot of value in this episode, Josh gives us insight into what has allowed him to reach this goal. I hope you enjoy it.
Enjoy early access here.
The Difference Between Practice and Theory
“In theory, there is no difference between practice and theory. In practice, there is.” — Yogi Berra
Understanding the difference between theory and practice translates to an edge in life.
When learning a new skill, entering a new job, or even trading the markets we need to remember that theory is oversimplified and makes progress look like a perfect curve to the upside.
In practice, there are a huge number of unknown variables that can only really be experienced in practice. No matter how much you read or study it seldom translates to a linear/exponential move. Delaying application and purely studying is inefficient and assuming a perfect linear move is unrealistic. Without applying or experiencing what we’ve learned, we’ll never make real progress.
Instead, we need to incorporate a model that assumes the variables that come with the application. Much like a bullish market moves in a series of higher highs and lower highs, all our endeavours in life will look similar.
As traders/investors we must be prepared for such deviations in the market. As humans, we must be prepared for the same in all our endeavours. We must expect and be prepared for the moments where life deviates from the expected course, it’s essential to not lose momentum. Being consistent when everything seems to be working against us prepares us for the next higher high. As long as we remain consistent, each dip on our journey will be higher than the previous one. Maintain this mindset throughout your endeavours and you will be unstoppable.